Janis Peterson, GRI, ABR, CSP Realtor®
Philadelphia Main Line Homes and Real Estate
Montgomery, Delaware, and Chester Counties
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Subject: You've found the house of your dreams...
Subject: Smart Ways to Save on Homeowners Insurance
So, you've resolved to reduce expenses this year. Fortunately, this resolution may be easier to keep than you think. Take another look at your homeowners insurance. In many states, companies offer policy discounts, credits and reductions. To trim costs, combine insurers' inducements with smart strategies.
Inquire about Discounts. Ask if you qualify for any of these types of premium reductions:
New Home: If your home is less than six years old, you may be entitled to a discount. Some insurers will slash 8% to 15% off the premium.
When shopping for a home, keep in mind that companies consider various factors when evaluating a home's eligibility for a reduced rate. These may include the home's proximity to emergency services such as a fire hydrant or fire station, type of construction, location and age.
Companion policy: Insuring your home with the same company that insures your life or car may entitle you to a discount. Some companies reward customers by cutting the premium 5% to 15%.
Protective device: Depending on the type, a fire or burglar alarm or sprinkler system installed in your home may generate a premium discount. Before purchasing an expensive system, check with your insurer; not all systems qualify for the discount. Then weigh the cost of an approved system against the expected savings on the premium.
Mature homeowner credit: Retirees age 55 or older may be eligible for this credit. Companies realize that retirees tend to stay close to home. As a result, homes are better maintained, and a potential loss, due to fire or burglary, could possibly be averted by a quick response. Some companies reward seniors with as much as 10% off.
Secured community credit: Residing in a fully secured (entry protected on a 24-hour basis) or partially secured (card activated entry) community may be all you need to take advantage of this premium credit.
Home improvements: Making improvements to your home, such as upgrading plumbing, replacing roofing, decreases the possibility of a loss and just might give you a greater return than you imagined, a reduced premium.
Lifestyle: With 23,000 smoking-related fires a year, companies tend to reward nonsmokers with a 2%-5% discount.
Loyalty discount: In recognition of their customers' loyalty, some companies reduce premiums by 5% after three to five years and by 10% after six years or more.
Resist over-insuring. In the end, it only inflates the premium. The Better Business Bureau suggests that you determine how much your home and possessions are worth. Start by itemizing your possessions then have an agent help you estimate the cost to rebuild your home. Also, don't make the mistake of insuring the land. Although your home could succumb to fire and other calamities, the dirt will remain.
Increase your deductible. Low deductibles cost plenty. By raising the deductible from $250 to $500, you may rack up 12% in savings; increase it to $1,000, and you could pocket up to 24%. And a $5,000 deductible may reduce your premium by up to 37%. Keep in mind that savings vary, depending on the insurer.
A word of caution: Before opting for a higher deductible, check with your mortgage lender. You may be required to carry a low deductible.
Consider an inflation guard endorsement. Your coverage will be automatically adjusted to inflation each year. If you elect this coverage, check with your agent that the amount of increase accurately reflects the cost of replacing your home. If it does not, increase or decrease the coverage as needed.
Compare companies. Take advantage of the competitive environment insurance companies operate in. Discounts vary from company to company and from state to state. Obtain three written estimates on comparable policies and services.
Look into group plans. Alumni associations and professional organizations often procure group discounts for members. See if one of your memberships offers a discounted rate on homeowners insurance.
"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, Realtor® can be reached at (610) 642-3744, e-mail: jp4re@pahomes.com. Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.
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